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Relationship between economic freedom and inclusive growth: a dynamic panel analysis for sub-Saharan African countries

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  • Jeffrey Kouton

    (Ecole Nationale Supérieure de Statistique et d’Economie Appliquée (ENSEA))

Abstract

Recent debates in economic development emphasize the importance of economic freedom and inclusive growth, particularly in developing countries. The aim of this study is to analyze the relationship between economic freedom and inclusive growth in thirty sub-Saharan African countries during the period 1996–2016. We use, for that purpose, the system GMM estimation and a panel causality test in a dynamic framework. Inclusive growth is measured by the GDP per person employed in Purchasing Power Parity, and the Heritage Foundation Economic Freedom Index is used to measure economic freedom. After taking into account cross-sectional dependence, the results suggest a positive and significant effect of the level of economic freedom and of the changes in the level of economic freedom on inclusive growth. Evidence is provided for a causal relationship from economic freedom to inclusive growth but not the other way.

Suggested Citation

  • Jeffrey Kouton, 2019. "Relationship between economic freedom and inclusive growth: a dynamic panel analysis for sub-Saharan African countries," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 21(1), pages 143-165, June.
    • Handle: RePEc:spr:jsecdv:v:21:y:2019:i:1:d:10.1007_s40847-019-00076-y
    DOI: 10.1007/s40847-019-00076-y
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    3. Donatella Saccone & Matteo Migheli, 2022. "Free to escape? Economic freedoms, growth and poverty traps," Review of Development Economics, Wiley Blackwell, vol. 26(3), pages 1518-1554, August.
    4. Ofori, Isaac K. & Figari, Francesco & Ojong, Nathanael, 2023. "Towards sustainability: The relationship between foreign direct investment, economic freedom and inclusive green growth," MPRA Paper 116956, University Library of Munich, Germany.
    5. Muhammad Kamran & Muhammad Zahid Rafique & Abdul Majeed Nadeem & Sofia Anwar, 2023. "Does Inclusive Growth Contribute Towards Sustainable Development? Evidence from Selected Developing Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 165(2), pages 409-429, January.
    6. Isaac K. Ofori & Francesco Figari & Nathanael Ojong, 2023. "Towards sustainability: The relationship between foreign direct investment, economic freedom and inclusive green growth," Working Papers 23/023, European Xtramile Centre of African Studies (EXCAS).
    7. Jonas Rapsikevičius & Jurgita Bruneckienė & Rytis Krušinskas & Mantas Lukauskas, 2022. "The Impact of Structural Reforms on Sustainable Development Performance: Evidence from European Union Countries," Sustainability, MDPI, vol. 14(19), pages 1-18, October.

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